The Republic of Ecuador

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The Republic of Ecuador

July 20, 2020

ELIGIBILITY LETTER

 

To the beneficial owners, or representatives acting on behalf of beneficial owners, of the following securities:

Series of Securities Common Code ISIN
10.750% Notes due 2022 Rule 144A: 145851696
Regulation S: 145851467
Rule 144A: XS1458516967
Regulation S: XS1458514673
8.750% Notes due 2023 Rule 144A: 162676865
Regulation S: 162676873
Rule 144A: XS1626768656
Regulation S: XS1626768730
7.950% Notes due 2024 Rule 144A: 108033118
Regulation S: 108033070
Rule 144A: XS1080331181
Regulation S: XS1080330704
7.875% Notes due 2025 Rule 144A: 205884882
Regulation S: 205884521
Rule 144A: XS2058848826
Regulation S: XS2058845210
9.650% Notes due 2026 Rule 144A: 153507210
Regulation S: 153507198
Rule 144A: XS1535072109
Regulation S: XS1535071986
9.625% Notes due 2027 Rule 144A: 162652915
Regulation S: 162653032
Rule 144A: XS1626529157
Regulation S: XS1626530320
8.875% Notes due 2027 Rule 144A: 170704142
Regulation S: 170704126
Rule 144A: XS1707041429
Regulation S: XS1707041262
7.875% Notes due 2028 Rule 144A: 175543236
Regulation S: 175542973
Rule 144A: XS1755432363
Regulation S: XS1755429732
10.750% Notes due 2029 Rule 144A: 192937701
Regulation S: 192937671
Rule 144A: XS1929377015
Regulation S: XS1929376710
9.500% Notes due 2030 Rule 144A: 205886630
Regulation S: 205886494
Rule 144A: XS2058866307
Regulation S: XS2058864948

* * *

           The Republic of Ecuador (the “Republic”) is considering soliciting consents (the “Consent Solicitation”) to certain amendments to the above-listed securities (the “Eligible Bonds”) and, in conjunction with the Consent Solicitation, inviting “Eligible Holders” (as defined below) to exchange such Eligible Bonds for new securities of the Republic (the “Invitation to Exchange” and together with the Consent Solicitation, the “Invitation”). If you are a beneficial owner, or a representative acting on behalf of a beneficial owner, of Eligible Bonds that is an Eligible Holder, please complete the attached Eligibility Certification and either submit it electronically or return it to Global Bondholder Services Corporation at the address set forth in the Eligibility Certification. If you are a beneficial owner of Eligible Bonds that is not an Eligible Holder, you may not participate in the Invitation, and you should not complete the attached Eligibility Certification.

An “Eligible Holder” is a beneficial owner of Eligible Bonds that certifies that it is: (i) a “qualified institutional buyer” as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), (ii) an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act (an “institutional accredited investor”) or (iii) a person outside the United States who (x) if located within a member state of the European Economic Area (the “EEA”) or the United Kingdom (the “UK”), a “qualified investor” as defined in Regulation (EU) 1129/2017 (as amended, the “Prospectus Regulation”) or a duly designated proxy thereof, and (z) if outside the EEA or the UK, eligible to receive the Invitation under the laws of its jurisdiction or a duly designated proxy thereof. The definitions of “qualified institutional buyer”, “qualified investor” and “institutional accredited investor” are set forth in Annex A.

           Please submit your responses as soon as possible in order to participate in the Invitation.

           This letter is neither an offer nor a solicitation of an offer or of a consent with respect to the Eligible Bonds nor creates any obligations whatsoever on the part of the Republic to make any offer or accept any consent.

           You may direct any questions to Global Bondholder Services Corporation, Attn: Corporate Actions, at 65 Broadway, Suite 404, New York, New York 10006, telephone number: + 1 (866) 470-3800 (toll-free) or (212) 925­1630 (collect).

                                                                                                    Very truly yours,

                                                                                                   

                                                                                                    THE REPUBLIC OF ECUADOR

 

 

 

ANNEX A

“Qualified Institutional Buyer” means:

           (1)       Any of the following entities, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least U.S.$100 million in securities of issuers that are not affiliated with the entity:

           (a)       Any insurance company as defined in Section 2(a)(13) of the Securities Act of 1933, as amended (the “Securities Act”);

           (b)       Any investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), or any business development company as defined in Section 2(a)(48) of the Investment Company Act;

           (c)       Any small business investment company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958, as amended;

           (d)       Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees;

           (e)       Any employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended;

           (f)       Any trust fund whose trustee is a bank or trust company and whose participants are exclusively plans of the types identified in subparagraph (1)(d) or (e) above, except trust funds that include as participants individual retirement accounts or H.R. 10 plans;

           (g)       Any business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”);

           (h)       Any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation (other than a bank as defined in Section 3(a)(2) of the Securities Act or a savings and loan association or other institution referenced in Section 3(a)(5)(A) of the Securities Act or a foreign bank or savings and loan association or equivalent institution), partnership, or Massachusetts or similar business trust; and

           (i)       Any investment adviser registered under the Investment Advisers Act.

           (2)       Any dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least U.S.$10 million of securities of issuers that are not affiliated with the dealer, provided that securities constituting the whole or a part of an unsold allotment to or subscription by a dealer as a participant in a public offering shall not be deemed to be owned by such dealer;

           (3)       Any dealer registered pursuant to Section 15 of the Exchange Act acting in a riskless principal transaction on behalf of a qualified institutional buyer;

           (4)       Any investment company registered under the Investment Company Act, acting for its own account or for the accounts of other qualified institutional buyers, that is part of a family of investment companies which own in the aggregate at least U.S.$100 million in securities of issuers, other than issuers that are affiliated with the investment company or are part of such family of investment companies. “Family of investment companies” means any two or more investment companies registered under the Investment Company Act, except for a unit investment trust whose assets consist solely of shares of one or more registered investment companies, that have the same investment adviser (or, in the case of unit investment trusts, the same depositor), provided that, for purposes of this subparagraph:

           (a)       Each series of a series company (as defined in Rule 18f-2 under the Investment Company Act) shall be deemed to be a separate investment company; and

           (b)       Investment companies shall be deemed to have the same adviser (or depositor) if their advisers (or depositors) are majority-owned subsidiaries of the same parent, or if one investment company’s adviser (or depositor) is a majority-owned subsidiary of the other investment company’s adviser (or depositor);

           (5)       Any entity, all of the equity owners of which are qualified institutional buyers, acting for its own account or the accounts of other qualified institutional buyers; and

           (6)       Any bank as defined in Section 3(a)(2) of the Securities Act, any savings and loan association or other institution as referenced in Section 3(a)(5)(A) of the Securities Act, or any foreign bank or savings and loan association or equivalent institution, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least U.S.$100 million in securities of issuers that are not affiliated with it and that has an audited net worth of at least U.S.$25 million as demonstrated in its latest annual financial statements, as of a date not more than 16 months preceding the date of sale under the rule in the case of a U.S. bank or savings and loan association, and not more than 18 months preceding such date of sale for a foreign bank or savings and loan association or equivalent institution.

           For purposes of the foregoing definition:

           (7)       In determining the aggregate amount of securities owned and invested on a discretionary basis by an entity, the following instruments and interests shall be excluded: bank deposit notes and certificates of deposit; loan participations; repurchase agreements; securities owned but subject to a repurchase agreement; and currency, interest rate and commodity swaps.

           (8)       The aggregate value of securities owned and invested on a discretionary basis by an entity shall be the cost of such securities, except where the entity reports its securities holdings in its financial statements on the basis of their market value, and no current information with respect to the cost of those securities has been published. In the latter event, the securities may be valued at market for purposes of the foregoing definition.

           (9)       In determining the aggregate amount of securities owned by an entity and invested on a discretionary basis, securities owned by subsidiaries of the entity that are consolidated with the entity in its financial statements prepared in accordance with generally accepted accounting principles may be included if the investments of such subsidiaries are managed under the direction of the entity, except that, unless the entity is a reporting company under Section 13 or 15(d) of the Exchange Act, securities owned by such subsidiaries may not be included if the entity itself is a majority-owned subsidiary that would be included in the consolidated financial statements of another enterprise.

           (10)     “Riskless principal transaction” means a transaction in which a dealer buys a security from any person and makes a simultaneous offsetting sale of such security to a qualified institutional buyer, including another dealer acting as riskless principal for a qualified institutional buyer.

* * * * * *

"Qualified investors" means:

           Persons or entities that are listed in points (1) to (4) of Section I of Annex II to Directive 2014/65/EU, and persons or entities who are, on request, treated as professional clients in accordance with Section II of that Annex, or recognized as eligible counterparties in accordance with Article 30 of Directive 2014/65/EU unless they have entered into an agreement to be treated as non-professional clients in accordance with the fourth paragraph of Section I of that Annex.

           Points (1) to (4) of Section I of Annex II to Directive 2014/65/EU include:

           (1)       Entities which are required to be authorized or regulated to operate in the financial markets. The list below shall be understood as including all authorized entities carrying out the characteristic activities of the entities mentioned: entities authorized by a Member State under a Directive, entities authorized or regulated by a Member State without reference to a Directive, and entities authorized or regulated by a third country:

a.       Credit institutions;
b.       Investment firms;
c.       Other authorized or regulated financial institutions;
d.       Insurance companies;
e.       Collective investment schemes and management companies of such schemes;
f.        Pension funds and management companies of such funds;
g.       Commodity and commodity derivatives dealers;
h.       Locals;
i.        Other institutional investors;

           (2)       Large undertakings meeting two of the following size requirements on a company basis:  balance sheet total: EUR 20 000 000, net turnover: EUR 40 000 000, own funds: EUR 2 000 000.

           (3)       National and regional governments, including public bodies that manage public debt at national or regional level, Central Banks, international and supranational institutions such as the World Bank, the IMF, the ECB, the EIB and other similar international organizations.

           (4)       Other institutional investors whose main activity is to invest in financial instruments, including entities dedicated to the securitization of assets or other financing transactions.

* * * * * *

"Institutional accredited investors" means:

           Any person who is not a qualified institutional buyer (as defined above) and who comes within any of the following categories:

           (1)       Any bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; any insurance company as defined in section 2(a)(13) of the Securities Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

           (2)       Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;

           (3)       Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000; or

           (4)       Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in § 230.506(b)(2)(ii).

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